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Facts
The assessee, a cooperative society, earned interest income from deposits made with other cooperative banks. The Assessing Officer denied deduction under Section 80P(2)(d) for this interest income. The CIT(A) confirmed the AO's action.
Held
The Tribunal held that cooperative banks are essentially cooperative societies and interest earned from deposits with them is eligible for deduction under Section 80P(2)(d) of the Act. The Tribunal followed its earlier decisions on this matter.
Key Issues
Whether interest earned by a cooperative society on deposits with other cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
80P, 80P(2)(d), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, AM :
This appeal at the instance of the assessee is directed against the order of the Ld. CIT(A) dated 21.11.2024 which is arising out of order u/s.143(3) of the Income Tax Act, 1961 dated 30.08.2022.
Assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming the action of the AO of denying deduction under section 80P in respect interest earned by the appellant society on deposits with other co-operative banks, not accepting the submission of the appellant in this respect.
The appellant prays that the AO be directed to delete the addition. The appellant craves leave to add, amend, alter, modify, delete or add a new ground of appeal before or at the time of hearing.”
3. The sole grievance of the assessee is that ld. CIT(A) erred in denying the benefit u/s. 80P(2)(d) of the Act for the interest of Rs.4,58,43,605/- earned from deposits made with various Co- operative Banks.
In the course of hearing, none appeared on behalf of the assessee. However, considering that the issue in question has already been decided by this Bench through catena of decisions, we have considered to hear the appeal with the able assistance from the ld. Departmental Representative.
We have heard the ld. Departmental Representative and perused the record placed before us. The solitary issue raised in the instant appeal is whether the assessee is entitled for deduction u/s 80(P)(2)(d) of the Act on the interest earned on deposits made with other Co-operative Banks. Undisputedly, the assessee has earned interest of Rs.4,58,43,605/- from Fixed deposits made with various cooperative banks.
Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. We observe that section 80P(2)(d) of the Act refers to the interest from Cooperative Society but it has been consistently held by this Tribunal (Pune Benches) that Cooperative banks are basically Cooperative Societies except that they get license for doing the banking business. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act. We therefore respectfully following the above referred decisions hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the alleged interest income earned from Cooperative Banks. Findings of the ld. CIT(A) is set-aside and the alleged disallowance is deleted. Effective grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on this 30th day of January, 2025.